YES Sec turns bullish on Godawari Power; upgrades to 'Add'; raises target

YES Securities has also raised its target price on Godawari Power & Ispat to ₹277 per share from its previous ₹261

YES Securities has upgraded its rating to ‘Add’ from ‘Reduce’ on Godawari Power & Ispat, citing improving visibility on volumes, earnings growth, and the benefits of the mining expansion. The brokerage has also raised its target price on the stock to ₹277 per share from its previous ₹261. 

 

“We revise our valuation multiple upwards to 7 times FY28E enterprise value to Earnings before interest, tax, depreciation and amortisation (EV/Ebitda) (earlier 6.5 times),” YES Securities said.

Why is YES Securities bullish on Godawari Power & Ispat?

Doubles BESS plan to 20 GWh

YES Securities highlighted that Godawari Power & Ispat has significantly scaled up its earlier BESS ambition.

 

Godawari Power & Ispat had initially announced its foray into the BESS segment during the Q1FY26 earnings call with a 10.0 GWh assembly plant, involving a total capex of ₹700 crore, to be funded through 60 per cent debt at the subsidiary level and 40 per cent equity infusion by te company. However, the company has since revised its plan and now intends to set up a 20.0 GWh plant in the first phase at a capex outlay of ₹1,030 crore.

 

Furthermore, it plans to double this capacity to 40.0 GWh by FY29E through an additional ₹600 crore investment. The first 20.0 GWh phase is targeted to be operational by Q1FY28E. Land acquisition for the project is complete, and the management believes the scale-up will improve land utilisation and lower unit manufacturing costs. The funding mix is expected to remain unchanged, with most of the capex financed at the subsidiary level.

Ari Dongri mine expansion nears EC; benefits from FY27

On the mining front, the long-pending expansion of the Ari Dongri iron ore mine is in the final stages of environmental clearance, according to YES Securities. As per the Parivesh portal, the proposal has been accepted and forwarded to the SEAC (State Level Expert Appraisal Committee) and SEIAA (State Environment Impact Assessment Authority) for further processing.

 

Management expects approvals to be secured by early-Q4FY26E. While mining operations could begin shortly after that, the financial benefits will be visible only from FY27E onwards, as the ore beneficiation plant is likely to start during H1FY27E. Once operational, the expanded mine will reduce the company’s dependence on merchant iron ore purchases for its pellet operations, thus enhancing backward integration and cost control, believe analysts. 

Pellet capacity ramp-up to support margins

The brokerage expects the company’s pellet sales to come in at 2.12 million tonnes for FY26E, before ramping up to 3.14 million tonnes in FY27E and 3.47 million tonnes in FY28E. Volume expansion will be supported by integrated raw material sourcing through the Ari Dongri mining expansion, which is expected to drive margin resilience over the medium term.

 

Godawari Power & Ispat’s 2.0 mtpa pellet plant expansion has commenced commercial production as of December 2025, taking total pellet capacity to 4.7 mtpa. During H1FY26, the company produced 1.34 million tonnes and is targeting 3.0 million tonnes of production by FY26-end.

 

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